BlackRock Capital Investment Corp (BKCC) 2011 Q3 法說會逐字稿

Good afternoon. My name is Kristin and I'll be your conference facilitator today. At this time I would like to welcome everyone to the Blackrock Kelso Capital Corporation Investor Teleconference. Our host for today's call will be Chairman and Chief Executive Officer, James R. Maher; Chief Operating Officer, Michael B. Lazar; Chief Financial Officer, Corinne Pankovcin; Secretary at the company and General Counsel of the Advisor, Laurence D. Paredes.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

(Operator Instructions)

Thank you. Mr. Maher, you may begin your conference.

Thank you, Kristin. And welcome to our third quarter conference call. Before we begin, Larry will review some general conference call information.

Thank you, Jim. Before we begin our remarks today, I would like to point out that during the course of this conference call we may make a number of forward-looking statements subject to risks and uncertainties. Many of these forward-looking statements can be identified by the use of words such as anticipates, believes, expects, intends, will, should, may and similar expressions. We call to your attention the fact that Blackrock Kelso Capital Corporation's actual results may differ from these statements.

As you know, Blackrock Kelso Capital Corporation has filed with the SEC reports which list some of the factors which may cause Blackrock Kelso Capital Corporation's results to differ materially from these statements. Finally, Blackrock Kelso Capital Corporation assumes no duty to and does not undertake to update any forward-looking statements. I would now like to turn the call back over to Jim.

Thanks, Larry. Good afternoon and thank you for joining our call today. I'd like to begin today's remarks with a brief overview of the third quarter and the year to date. I'd also like to discuss the current market environment for investing.

We're pleased to report that we had a busy and productive third quarter with gross new investments aggregating $139.4 million. This quarter was also highlighted by net portfolio growth of more than $50 million. This follows $10 million of net growth during the second quarter, bringing our net portfolio growth to approximately $97.5 million through September 30th. Including the fourth quarter to date, net new investment is approximately $145 million.

Portfolio growth continues to be our primary area of focus. We remain under leveraged and have plenty of debt to capital available under our bank credit facility to support our near-term growth goals. Borrowing costs under our revolving credit facility is our lowest overall cost of capital.

We are particularly proud of these results given the overall market environment for leveraged finance. Following a period of increased new issuance in the first quarter, leverage alone volumes fell 30% during the second quarter and 57% in the third quarter, as tracked by S&P.

In the new issue market, yield requirements increased, which in turn reduced the level of opportunistic deal flow. But the coin was slightly more severe in the institutional segment of the loan market where volumes tumbled 63% to $28 billion, the lowest total since the fourth quarter of 2009. For example, loans backing dividends fell to $4.1 billion from $16.5 billion the second quarter while there were no meaningful repricing transactions during that quarter compared to $75.7 billion in the first half of the year.

Over the past three months, fund flows into and out of retail and institutional loan funds remain volatile. This volatility is one of the most significant contributing factors to the reduced volume of new loans. After averaging a record $4.2 billion in the first half, inflows to mutual funds fell to $1.2 billion in July. In August, investors pulled a record $5.5 billion from loan funds. Outflow slowed in September, but persisted at $2.7 billion.

Our universe of new investment opportunities tends to be more closely correlated with change of control transactions, which comprise the minority of leverage lending opportunities during the first half of the year. Second quarter transaction point to leverage buy outs was approximately $36 billion compared with $29 billion for loan financings for LBOs and acquisitions completed in the third quarter.

Middle market loan volume also fell in the September quarter, but not as much as more liquids as indicated credits. This segment of the market continues to be led by regional banks, finance companies and a handful of institutional investors like Blackrock Kelso Capital that are focused on smaller club transactions. And although not a perfect proxy for our addressable market, volume in these middle market loans were down 48% between July and September to $2.4 billion from $4.7 billion during the second quarter.

Generally, transaction velocities remain slower than we would have expected. For example, the median holding period for private equity backed companies has increased from 3.8 years in 2008 to 4.8 years today. Whether this is driven by political uncertainty, economic uncertainty or other macro factors remains unclear.

We continue to believe that in addition to or perhaps because of these factors, price gap between borrowers and sellers that we've identified in earlier conference calls persist. This continues to limit the number of change of control transactions and sellers are optimistic given year to date earnings improvements and remain reluctant to sell businesses based on trailing cash flow levels while EBITDA is increasing.

On the other hand, borrowers are more cautious. In their view, the outlook remains uncertain. Therefore, borrowers are generally unwilling to pay multiples of future EBITDA as the basis for a transaction regardless of the availability or the cost of debt capital.

We continue to focus our attention on our dividend coverage for the year and into the future. For the quarter we had net investment income as $0.29 per share. And yesterday our board of directors declared a regular fourth quarter dividend of $0.26 per share payable on January 4, 2012.

In the current quarter, our net investment income of $0.29 a share exceeded our $0.26 per share dividend. Our adjusted net investment income of $0.25 a share was slightly behind our current dividend rate. Year to date adjusted net investment income has totaled $0.73 together with approximately $0.12 per share of carry forward income at the beginning of 2011. We have had year to date adjusted net investment income that has exceeded our year to date dividends of $0.84 per share.

One of the things that we have discussed frequently has been our desire to prudently grow our investment portfolio throughout the year by deploying our available debt capacity. We closely monitor what has generally been difficult and volatile market conditions dominated by macro factors. Uncertainty surrounding the economic environment as well as rapid, frequent changes of market liquidity has reinforced our strategy of remaining conservatively positioned.

We continue to utilize our established sourcing model and high credit underwriting standards to structure sound investments in middle market companies. We remain pleased with the investment opportunities that have resulted from our strong relationships in the middle market. We've examined more than 80 investment opportunities during the third quarter, consistent with the average number we reviewed during the first half of the year, notwithstanding the general market slowdown. Mike will now discuss our portfolio activity and market conditions in more detail.

Thank you, Jim. I'm pleased to have the opportunity to speak today about some of our financial results and to discuss how the market conditions affect our portfolio positioning.

With respect to the quarterly portfolio details, total investment income was $33.2 million for the third quarter compared with $37.1 million for the quarter ended June 30th. Net investment income totaled $0.29 per share compared with $0.35 per share in the second quarter.

Had our incentive fees been accrued ratably throughout the year rather than heavily weighted to the fourth quarter, as required under GAAP, our net investment income would have been $0.25 in the third quarter compared with $0.29 for the second quarter and $0.20 for the first quarter as adjusted.

The largest contributor to the difference between our second and third quarter results was the amount of fees related to prepayments during the second quarter. Adjusted, to remove the effects of capital structuring fees and prepayment fees in each quarter, our investment income for the third quarter was $29.6 million, up from $28.2 million in the second quarter. This increase is the result of a larger portfolio and higher weighted average yields. Total investments at their current cost basis were $1.05 billion at September 30th compared to $994 million at the end of the second quarter.

As Jim mentioned, in total we invested $139.4 million during the third quarter. We made two new portfolio company investments during the quarter, which totaled $75 million. And in addition, we made an investment in a new financing for a prior existing portfolio company of $40 million as well as several investments across the existing securities in existing portfolio companies.

All of our new portfolio company investments in the quarter were made in senior secured loans or notes. Each of these investments was subject to a capital structuring fee payable to Blackrock Kelso Capital. The largest of our third quarter investments was a $50 million investment in the senior secured notes of Sur La Table. Generally speaking, in aggressive and volatile market conditions, we believe that a focus on senior secured positions in portfolio companies remains the most prudent use of our capital.

Investments in existing securities of existing portfolio companies were primarily a series of opportunistic secondary market purchases of MediMedia USA, Penton Media and Source Corp., which were purchased at discounts.

A very topical issue in the credit markets is the extreme lack of liquidity, which contributes to the volatility. Dealer inventories are very low and they are generally not willing to use their balance sheets to support markets. We believe this will continue to lead to opportunities for investors with capital and the ability to be nimble. Throughout the year we've been working actively to position the portfolio in higher yielding assets. The weighted average yields of the debt and income producing securities in our portfolio at their current cost basis were 11.9% at September 30th, up from 10.5% a year ago and 11.5% at the end of the second quarter.

Portfolio rotation into higher yielding assets with live work floors or fixed rates continues to increase our weighted average portfolio yields. During the third quarter, our new investments generally have expected all in returns including fees and discounts of approximately 11.5% to more than 15%. Also contributing to higher average portfolio yields is the effect of certain portfolio company exits. Of our $87.6 million of repayments in the third quarter, more than half of that amount or $54.2 million was comprised of securities with live or based floating rates that did not contain floor arrangements which had current coupons of less than 7.5%.

Higher portfolio yields on a larger overall portfolio have contributed to the increase in interest income throughout the year. Looking forward to the fourth quarter and next year, this higher level of interest income provides better visibility with respect to our taxable income.

As we have worked to position the portfolio for the current uncertain economic environment, the percentage of our portfolio comprised of senior loans and notes has increased from 58% of the portfolio at the end of the first quarter to 69% today. At September quarter end, the remainder of the portfolio consisted of 17% unsecured or subordinated debt securities, 11% equity investments and 3% cash and cash equivalents.

Total debt stood at $317.5 million on September 30th. In addition, we had cash and cash equivalents on our balance sheet of $30.2 million for net debt of $287 million or a 0.4 to 1 coverage on a net basis. Our balance sheet provides us with significant capital resources available for new investment. At September 30th we had $232.6 million available under our credit facility. Balance sheet remains underleveraged, affording us the opportunity to raise net investment income without raising additional capital.

Total expenses for the three and nine months ended September 30 were $12.3 million versus $8 million for the three months ended September 30, 2010. Of these totals, for the three months ended September 30, 2011, $4.2 million was interest and credit facility expenses versus $1.7 million for the three months of September 2010. The increase in the 2011 period was due to the issuance of the $175 million of principal amount of our senior secured notes back in January.

We continue to be pleased with overall performance of our portfolio companies. Non-accruals remain low. Currently 1.2% of our total portfolio at fair market value, corresponding to 1.6% of our total portfolio at cost is held on non-accrual. And the weighted average rating of our portfolio companies at September 30 was 1.26.

The third quarter saw a slight decrease in portfolio company valuations from 95.4% of costs at the end of the second quarter to 94.6% of costs at the end of the third quarter. Depreciation on investments during the quarter exceeded appreciation by approximately $9 million. This is largely a result of overall market value changes during the quarter.

Since the end of the third quarter, we have made new paramount investments of $72.5 million in new and existing portfolio companies at coupons of 12% and higher. The largest of these transactions resulted in Blackrock Kelso Capital earning capital structuring fees in conjunction with the investment. Repayments in the fourth quarter to date have totaled approximately $23 million. Over the next several quarters we expect that we will be able to continue to grow our total assets by using our currently available loan facilities to make new investments.

At Blackrock Kelso we have an active opportunity pipeline and we anticipate closing at least one additional investment during the fourth quarter, although of course no assurances can be made. While the market has been aggressive recently, middle market transactions are still more conservatively capitalized, still have lower levels of leverage and better debt coverage than the transactions available in liquid credit markets. With that, I'd now like to turn the call over to Corinne to review some of the GAAP financial information for the third quarter.

Thanks, Mike, and hello, everyone. I will now take a few moments to review some of the details of our third quarter 2011 financial information. In comparing the third quarter to the previous three months, our total investment income decreased approximately $3.9 million to $33.2 million or $0.46 per share. The decrease in investment income for the three months ended September 30, 2011 is primarily attributable to interest and one-time fees collected from the early repayment of one of our largest portfolio company investments during the second quarter, which totaled more than $8 million. On average, our net investments made during the second quarter closed more ratably throughout the period while third quarter investments were slightly more weighted toward the beginning of the quarter.

Fee income earned for capital structuring during the third quarter was approximately $3.6 million. Net investment income of $21 million during the third quarter equated to $0.29 per share as expenses increased approximately $900,000 compared to the second quarter. On an adjusted net investment income basis, the third quarter was $18 million, or $0.25 per share, compared with $20.9 million or $0.29 per share in the second quarter.

Blackrock Kelso Capital did not realize any material gains or losses during the third quarter and the portfolio fair market value was affected by $9.2 million of net depreciation during the period and $1.1 million of net real life gain. For the three months ended September 30, the net increase in net assets from operations was $12.9 million, or $0.18 per share.

At quarter ended September 30th, the Company was in compliance with regulatory coverage requirements with an asset coverage ratio of 323% and was in compliance with all financial covenants under the credit agreement. At the quarter end, we had net borrowing of $287.3 million and our net borrowing amounted to 29% of fair market value of our portfolio. Taking our most restrictive debt covenant into account, at quarter end we had cash equivalent and borrowing capacity of $263 million.

In addition, during the third quarter we repurchased 200,000 shares under our share repurchase plan at an average price of $7.65. Net asset value was $9.75 per share at September 30, 2011. This was up from $9.62 per share at year end due to the increase in portfolio company valuation. The absence of expenses related to any incentive fee in the year to date period and the excess of year to date earnings over year to date dividend payments. With that, I would like to turn the call back to Jim.

Thanks, Corinne. As we look forward to the remainder of 2011 and into 2012, we are, needless to say, focused on continued prudent portfolio growth adhering to our conservative investment philosophy focusing on preservation of capital. We remain disciplined seeking outsized returns without taking any inappropriate risks. That said, our capital deployed and new investments during the third quarter outpaced our first and second quarter results and the fourth quarter to date has also benefited from robust new originations.

We continue to put more money to work at higher yields and well structured transactions as the year progresses. Overall, our pipeline of opportunities remain solid, which allows us to stay disciplined. On behalf of Mike, Corinne, Larry and myself, I'd like to take this opportunity to thank our investment team for all their efforts and to thank you for your time and attention today. Kristin, would you now place the call open for questions?

(Operator Instructions)

Your first question is from the line of Troy Ward with Stifel Nicolaus.

Great. Thank you and good afternoon. Congratulations on what looks to be a very solid quarter. A couple of questions as it relates to some income items in the 10-Q. In note ten of the 10-Q you do provide a table that shows the quarterly amortization discount and premium. In this quarter it was $2.7 million, which has been pretty similar. It was $2.9 million last quarter. I just want clarification, is this the number that flows through the income statement? I assume it is. And is this just the scheduled amortization or when something prepays does all the previously unamortized portion also flow through that line?

It's Mike. I'll start and perhaps Corinne can jump in with some of the specifics about the quarter and about the numbers in the table that we can speak about it generally. As you know, whenever we book a new investment, whenever we make our capital available to a new portfolio company or whenever we purchase a new loan, to the extent that we do so with some fee, you go through a GAAP analysis as to whether that fee is considered a discount or a fee that's recognized in the period. With respect to the fees or the amounts that are represented as discounts, those discounts ratably amortized into income over time until the maturity of the loan or the note.

To the extent one of those securities that is prepaid has some unamortized discount associated with it, at the moment of prepayment, that unamortized discount would be released into income.

That's right.

And does it come through the top line or is it included in this 2.9 or is there some level of unamortized fee that's not captured by that? Is that just the scheduled or is that all of it, I guess is what I'm driving at?

Hi. This is Corinne. How are you?

Good.

I'm having a little bit of trouble finding the $2.9 million. I do understand your question. I can address it if you can point me --

Oh, I'm sorry. It's $2.7 million this quarter. It was $2.9 million last quarter.

Okay. There we go.

It's on page - yes.

I have it now. So amortization of premium discount net I think is what we're looking at.

That's right. Yes.

Okay, to answer the question, it would be a combination of those factors. So in certain circumstances prepayments will drive an accelerated depreciation or amortization through that line. And in some instances it would become an accelerated fee income. And in some instances it would run through our gain line. For the most part, you will see it in that $2.7 million.

Okay. And can you tell us what the current balance of unamortized fee is at the end of the quarter?

Well, we can give you a range. It's unamortized discount really that we're talking about.

That's right.

But it's sort of between $5 million and $10 million at the moment.

Okay. And then one other question related to the income, and you touched on it. The $3.6 million fee was classified a little differently this quarter as an upfront fee. So was that all recognized this quarter because of the structuring fee?

This is Mike again, and I'll hand it back to Corinne to give the detail, but the $3.6 million of fees, it's fees for structuring, so these are up front capital fees. And that's not necessarily all of the fees in any one quarter. For example, in comparing last quarter, we had a very large fee income item that we have discussed, but because that is a prepayment fee and a bunch of sort of other smaller fees that don't correspond to capital structuring and wouldn't compare to this $3.6 million and so they're not in that comparison even though, as you know, part of the business is we make fees all the time. We make amendment fees, prepayment penalties, structuring fees. There's amortization discounts. It's a big part of the business. So that's the general comment and now I'll just hand it to Corinne to talk about the specifics of this quarter and how this $3.6 million in particular is recognized.

The $3.6 million, as Mike described, is corresponding to capital structure and fees and it's not just very simple revenue recognition with respect to that type of effort that is made by the business. And we would expect to see that it's not something that's easily predicted. It's dependent upon the businesses' activities and it's recognized as earned in the current quarter.

Okay. Great. That's what I thought. And then real quick, I caught your recorded to date prepayments of $23 million. I missed what the quarter to date originations were.

Sure. It's approximately $72.5 million quarter to date for the fourth quarter, offset by again approximately $23 million of repayments quarter to date for the fourth quarter.

Okay. And then great, one quick more and then I'll get back in the queue. You mentioned three new companies in the quarter. Clearly the Sur La Table and Progressive I think were two of them. What was the third one? I think it was an existing company.

Yes, the third one I mentioned is a little bit betwixt and between, frankly. It's MCCI where it's a company that we formerly had an investment in, but where there's been sort of a redo of the whole capital structure and so we were an incumbent there and we made a new loan to a company that we had formerly been in. So it's sort of caught in between new and old, but that's the third new $40 million investment.

Okay. Great. Thanks, guys.

Your next question is from Rick Shane with JPMorgan.

Hi, guys. Thanks for taking my questions. Just two quick ones. You'd said $23 million of repayments quarter to date. Have you received any notifications of any other pending repayments or any indications?

Hi, Rick. It's Mike. For starters, we only know what we know, so we know what's happened quarter to date through today. And there's always in the ordinary course of our business regular way amortization, excess cash flow, repayments of loans and then from time to time there will be a change of control transaction or there will be some other refinancing that will take us entirely out of a position. So what we know about is the $23 million quarter to date.

Okay. Great. Second question, administrative expenses went from [$2.3] to [$2.9] during the quarter. As we sort of try to understand what the run rate is going to be going forward because the model is pretty sensitive to that, was there anything anomalous in the third quarter we should be aware of or should we see this as sort of a new threshold for administrative expenses?

Well, I don't know that administrative expenses went up that significantly.

Quarter on quarter administrative expenses, [319] versus [203].

Right. So there wasn't an actually very big increase from the quarter on admin.

Got it.

But overall, expenses were higher. The single largest contributing factor to expenses is obviously interest costs and as we discussed in the prepared remarks and as you're well aware, when we fixed a significant portion and extended maturities on a significant portion of our liability structure early in the year, by undertaking to do the $175 million of notes, obviously our interest costs went up in conjunction with that. So we're running at a slightly higher rate. And then as the portfolio grows, incremental borrowings add to that interest cost. That sort of goes without saying, but that's the biggest change, I think, Corinne, in our quarter over quarter.

Yes. Absolutely.

Thank you, guys.

Your next question is from Joel Halk with Wells Fargo.

Thanks and good evening. Looking at BDCs that are reported we've seen NAV per share declines anywhere from 7% to 15% and I know you guys are flat. You are to be commended for that. The one thing I wanted to maybe talk about what's unique this quarter in your portfolio and maybe touch on your valuation methodology and give us some insights into why your book value is so stable in the third quarter just given all of the downside volatility in risk assets.

Sure. And I'm sure Jim will want to add something to this, but I think just backing up and at a high level, our process for valuation has been consistent from the get go. We haven't adjusted it or amended it and what we do is we use outside unaffiliated third parties. We use more than one of them, professional valuation firms. They go through and they value each portfolio company with two small exceptions. They do this for every portfolio security every quarter. The two small exceptions are an investment that was made in the middle of the prior quarter isn't quite old enough to get evaluation yet because it's obviously by definition less than 90 days old. So those get valued on the second quarter that we're an investor. And the only other exception is really tiny de minimis positions that are sort of holdovers or small positions or things that we'll eventually get out of it that are not material to the overall portfolio.

So what we do in our process that's slightly different than some others but has been done consistently from the beginning is that we don't prepare the first draft of what we think the values are. We leave that exercise to the third parties. So they're not opining that what we think is right. They are coming up with their own conclusions each quarter. And we've done that consistently since before we've been public. So there's no real change there.

I think when we looked at the quarter on an aggregate basis, there are, as you can well imagine and if you look through the schedule of investments, there are lots of ups and downs and movements sideways throughout the portfolio. And in this particular case and this particular quarter, it turned out to be that it was not down very much, but not without a lot of movement in a lot of securities.

Okay. And so just to be clear, the third parties submit the valuation to the board and are you saying the board just takes the third party valuations at the end of the quarter?

No. We work with them to make sure that they are using accurate complete up to date information. We correct mathematical errors to the extent they exist. We provide appropriate input or we put them directly in touch with the companies as necessary. And that's all part of the process that's remained the process. And the board reviews each valuation each quarter as well as reviews the process that we go through to arrive at those values. I can't really speak for them, but I believe they take a lot of comfort in the consistency of our approach over time.

Okay. I appreciate the color. Thanks, guys.

(Operator Instructions)

And you do have a question from Dean Choksi with UBS.

Thank you and congratulations on the solid quarter. Apologize for belaboring on the fees, but can you help me understand what a recurring level of the income is that we should be taking into account when looking at dividend coverage to the extent that there is no recurring level of fee income? Can you help me understand what the exact fee income was in the quarter to kind of get a sense of the spread income of the business?

Well, again there's lots of elements of fee income. The most significant two elements of our fee income in any one period with respect to any transaction are new deal fees where we provide some capital structuring, some underwriting, some up front work, where that fee is viewed as GAAP as earned in the period. Those tend to be larger and those tend to correlate, although not perfectly, with new transactions.

The second category, which are more difficult to predict, that also can be large, are fees related to early prepayments of loans. Not all loans have prepayment fees and the tenure of the loan, when it is repaid affects the total size of a potential prepayment fee. That's part of what drove the particularly large prepayment fees in the second quarter this year.

In addition to those two lumpier categories of fee income, there is generally a lower level of income related to the amortization of discounts, which Corinne discussed a few minutes ago. That tends to be smaller amounts because it spreads the discount applied to a particular investment over the life of that investment.

And then lastly what I would call ordinary course of business fees like amendment fees or upfront fees or commitment fees related to ongoing involvement with portfolio companies. And in any one quarter that mix can change, but over any prolonged period of time it's relatively consistent.

Okay. Thank you. You mentioned that you had $0.10 or $0.12 as bill over income at the beginning of the year.

$0.12.

$0.12. Thank you. Since your core earnings were above your dividend for the last couple quarters, can you help what is the I guess bill over income or kind of excess income that you have?

If you go through sort of on a quarter by quarter basis, in the first quarter we use the $0.12 of spill over income that we had at the beginning of the year. And if you take the second two quarters where our dividend has been at $0.26 a share, I believe we're one or two cents above that in terms of spill over income going into the fourth quarter.

And again, when we announced the $0.26 dividend we said that we set that looking forward, taking into consideration what we thought our growth in our portfolio would be and what our fees were likely to be for the foreseeable future. And as it turns out, we're a couple of cents ahead of that at the end of the third quarter.

And I was just going to add to that, I think the reason that we prepared the adjusted net income number, and we've been doing this for a while now, is while it's imperfect, it's a pretty good proxy for what our net investment income would be were one to spread out incentive fee or our expected incentive fee and attempt to spread it ratably over the quarters that it was earned.

And so, again, while not entirely perfect, it is a good proxy so when we think about the dividend and we think about being under or over by two cents, as Jim just described, we think about that adjusted net investment income number.

Okay.

We obviously also look at the underlying investment interest income and, as Mike pointed out in his remarks, on a quarter by quarter basis that increased from $28.2 million in the second quarter up to $29.6 million in the third quarter and we would expect that would be a continued progression there. And it was a substantial increase between the second quarter and the first quarter of that number.

Thanks. I'll hop back in the queue.

Your next question is from Arren Cyganovich with Evercore.

Hi. Thanks. Were there any prepayment fees of note in the quarter?

No, there were no significant prepayments during this quarter.

Okay. And on the $73 million or so that you've invested for quarter to date, are there any particular structuring fees that you would expect on those investments?

Yes. As I mentioned in the remark, while I can't give you a precise number at this time, the largest of the investments comprising that [$72.5] or so million quarter to date did have a capital structuring fee related to it paid to us.

Okay. Thank you.

And at this time I'm showing that there are no further questions in queue.

Well, thank you all for joining us today. We appreciate it and as always we are available for questions as they come to mind. Thanks again.

Thank you. This does conclude today's conference call. You may now disconnect.